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403b Retirement Catch-Up Options for Public School Employees

Tim Hayes AIF®, CRPS®, AWMA®, CFS®, APMA®, CAS®

Public school educators, including university professors and administrators, can save more pre-tax than any other public or private-sector employee.

That’s because educators are eligible for two retirement plans, both with unique catch-up options.

In 2020, educators can save $19,500 into a 403(b) and a 457 plan. Those 50 years of age or older can also contribute an additional $6,500 into one of the two programs.

The 403(b) catch-up allows educators with low 403(b) savings who have worked 15 years with the same employer to save an additional $3,000 per year for five years.

One problem with this catch-up is that any contributions over $19,500 are credited first against the 15-year rule, so a teacher aged 50 or older could use up their 15-year catch-up without knowing it.

The 457 plan has a more considerable catch-up. It allows eligible employees to contribute $37,000 per year for three years before their “regular retirement date.”

The 403(b) catch-up can be used in conjunction with the age of 50 catch-up and a 457 plan. However, the 457 plan catch-up cannot be used with the age of 50 catch-up, although the employee could still contribute to a 403(b).

Not everyone can afford to save the maximum; however, it is good to know that educators have a well-deserved potential benefit.

Your school system provides you with a list of 403(b) companies. The 457 plan is different. The city/town usually provides one company. Both typically give you a broad range of investment options.

Massachusetts Public Employees & Social Security Eligibility

Sign Up Today For a 403(b) Plan and Start Paying Fewer Taxes Tomorrow

Since 1990, I’ve been a financial advisor specializing in helping educators set up, invest in, and service their 403(b) plans.

I have accumulated a reservoir of knowledge on the retirement system, the social security offset/windfall elimination, 403(b) plans, and other financial issues specific to public employees.

Because I am an independent financial advisor who provides flexible payment options (fee-only, hourly rate, or commission), I can work with most companies in your school system’s 403(b) plan. A partial list of companies I work with includes Fidelity, American Funds, Putnam, MFS, Aspire, Security Benefit, Axa, and Oppenheimer.


  • School systems should think about eliminating the fifteen-year catch-up from their 403(b) plan, especially if there is no tracking system in place when the catch-up contribution starts.
  • Any employee who is saving the maximum in a 403(b) plan and wants to save more money can usually open up a 457 plan.
  • Remember, if you are eligible, you can use the 457 catch-ups with the 403(b) plan, plus the age fifty catch-up, making it an excellent option for any educator who wants to defer sick buybacks.

These are the opinions of Tim Hayes and not necessarily those of Cambridge Investment Research. They are for informational purposes only, and should not be construed or acted upon as individualized investment advice. 

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About Financial Advisor Tim Hayes

Tim Hayes

Financial Advisor


No Cookie-Cutter Solutions

As an independent financial advisor, I have access to many financial products, including mutual funds, ETFs, stocks, bonds, and annuities. I use them to build custom portfolios, trusts, and retirement plans for people and organizations.

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If you're concerned about your financial future, let’s talk


If you’re concerned about your financial future, let’s talk